Thursday, May 13, 2010

China: Solid growth and higher inflation clear the way for revaluation $CNY $CAF

• Today’s economic data suggests that growth in China remains solid and inflationary
pressure is increasing albeit not yet alarmingly. While there are some signs that export
growth is slowing, domestic demand remains strong.
• Today’s data supports our view that China will soon resume appreciation of CNY,
although recent volatility on the financial markets has probably postponed it slightly.
While we cannot rule out the possibility that China will move ahead of the US-China
summit on 24 May, June now looks more likely.


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